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Healthcare Industry Not Pleased with Recent CMS Hospital Star Ratings

The Centers for Medicare & Medicaid Services (CMS) released its hospital quality star ratings on July 27 amid protest from legislators and the healthcare industry. Those opposed to the release requested it be delayed 1 year over concerns the criteria used to generate the star ratings were unfair. The previously released data overview revealed a trend in which disproportionate share hospitals fared worse than hospitals that were either smaller or served lower-risk patients regarding the 64 quality measures reported on CMS’s Hospital Compare website. The most common rating, earned by 39% of hospitals, was 3 of 5 possible stars. Healthcare industry leaders and hospital advocacy groups have been vocal in their criticism of these ratings. They believe the rating system is biased against hospitals that serve sicker, more complex, and poorer patients, and that socioeconomic factors are not considered when grading each hospital. While CMS has touted the rating system as a tool patients may use to navigate the healthcare system more effectively and efficiently, critics state ratings like these will only further confuse patients and families.


Tricare Cuts Out UnitedHealthcare, Doubles Humana’s Service Area

The US Department of Defense has decided to award its Tricare west region contract to Health Net Federal Services (HNFS). UnitedHealthcare was serving the west region, and HNFS was already serving the Tricare North Region. This decision will, if approved, effectively cut out UnitedHealthcare of all Tricare coverage. This comes after Tricare attempted to cut costs by reducing the number of regions from 3 to 2, combining the North and South regions into a new East region covered by Humana. This move doubled Humana’s service area from 3.1 million members to 6 million members. The West region was managed by UnitedHealthcare from 2012 until this year. The Health Net contract is worth more than $17.7 billion over the course of the 5-year contract. The contract is still subject to final approval, and unsuccessful bidders with have an opportunity to protest the decision.


Cigna Plans to Sell on 3 New Exchanges in 2017

Some health insurers are decreasing their plan offerings in the public exchanges, but Cigna views the exchange as a way to increase sales. Cigna sold plans in 7 state exchanges in 2016; it has filed to sell in Illinois, North Carolina, and Virginia exchanges in 2017. Cigna representatives said the strategy will provide long-term growth opportunities. Cigna is expanding its exchange participation as Humana and UnitedHealthcare withdraw from many exchanges after millions in losses in 2016. Exchange plan enrollees are typically sicker and require more high-cost care, a trend that insurers have blamed for financial losses and the subsequent withdrawal from public marketplaces.

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